According to the price monitoring of Business Society, the prices of stainless steel and nickel continued to decline in November. As of the end of the month, the spot price of stainless steel was 12628.57 yuan/ton, a decrease of 6.16% compared to the beginning of the month. As of the end of the month, the spot nickel quotation for upstream nickel was 124700 yuan/ton, a decrease of 25.66% compared to the beginning of the month. In November, the new production of electroplated nickel continued to increase, and a large number of intermediate nickel products were put into production. Nickel sulfate and pure nickel were inverted, and the production of nickel sulfate by dissolving nickel beans was no longer advantageous. The electroplated nickel produced by nickel sulfate had more advantages. Driven by profits, production gradually transitioned from a shortage of supply to an excess situation in the pure nickel market, and nickel prices continued to decline. However, downstream stainless steel prices have further declined due to factors such as lower costs and weak downstream demand.
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Macro surface bias
After Powell’s speech, US short-term interest rate futures traders postponed the expectation of the Federal Reserve’s first rate cut from May next year to June. According to data from the National Bureau of Statistics, consumer prices for residents in October decreased by 0.2% year-on-year and 0.1% month on month. Retail sales in the United States remained resilient in October, which to some extent offset recent optimism about a decline in US inflation. The US dollar index and US bond yields showed signs of peaking and falling in early November, supporting the momentum behind the high level operation of the US dollar index and US bond yields – the core CPI also showed a sustained weakening trend. The excess savings of current US residents are about to be depleted in the fourth quarter, and the tightening financial environment will gradually affect the judgment of residents on their balance sheets.
Nickel fundamental surface
Comprehensive oversupply of nickel
The new production increase of electroplated nickel can be continuously increased, and a large number of intermediate nickel products are put into production. Nickel sulfate and pure nickel are inverted, and the production of nickel sulfate by dissolving nickel beans is no longer advantageous. The electroplated nickel produced by nickel sulfate has more advantages. Driven by profits, production has gradually transitioned from a supply shortage to an excess situation in the pure nickel market. The growth rate of NPI project production in Indonesia, the reduction in production of Qingshan stainless steel project in Indonesia, the decrease in local consumption of nickel iron in Indonesia, and the increase in domestic flow back, have squeezed into the domestic nickel iron market with low cost. In the fourth quarter, Indonesian Chinese enterprises increased their production capacity and operating rates for high ice nickel and refined nickel from China and Indonesia. However, short-term oversupply still suppresses the potential for nickel price increases.
LME nickel inventory slightly increased
As shown in the above figure, LME nickel inventory slightly increased in November. As of the end of the month, LME nickel inventory was 44898 tons, an increase of 0.25% from the beginning of the month and a decrease of 18.92% from the beginning of the year. The global refined nickel explicit inventory maintains an accumulation trend.
Weak demand
Downstream 300 series stainless steel production stoppage and production reduction have expanded, and overall inventory remains at a high level, resulting in certain losses for stainless steel plants. Alloy is the main downstream of pure nickel, with better demand for military and ship alloys, and inferior demand for civilian alloys. The demand for electroplating is relatively stable.
Stainless steel basic surface
Steel mills shut down, reduce production, and expand production
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Downstream 300 series stainless steel maintenance shutdown and production reduction have expanded, and overall inventory remains at a high level. Stainless steel plants have incurred certain losses, but production still maintains an incremental trend, and the steel market as a whole is showing a weak operation.
As of the end of the month, the total inventory of stainless steel was 995300 tons, a decrease of 5.43% compared to the beginning of the month. The overall inventory of stainless steel has slightly decreased, but it is still at a relatively high level.
Downstream demand is sluggish
Although domestic macro policies have once again intensified, downstream demand is sluggish, and there is greater pressure on stainless steel. Due to the recent decline in nickel iron and nickel ore prices, the cost of stainless steel has decreased, and poor terminal demand has led to negative feedback in the industrial chain, resulting in weak mining prices.
Annual price comparison chart of nickel stainless steel
According to the annual price comparison chart of Business Society, in the past five years, the price of stainless steel has fluctuated in December, and the probability of nickel price increase in December is relatively high.
In summary, Indonesia’s nickel iron reflux remains high, nickel iron prices frequently decline, domestic nickel iron factories suffer losses, the industry chain shows negative feedback, nickel ore prices are under pressure and downward, demand for nickel in new energy batteries is low, battery grade nickel sulfate continues to decline, excess nickel element pressure continues to transmit towards pure nickel, and downward pressure on nickel prices to break through levels is expanding. It is expected that nickel prices will continue to operate in a weak and volatile manner.
For stainless steel, the cost side has moved downwards and there is no sign of a rebound. As we enter the low demand season in December, it is expected that stainless steel prices will continue to operate weakly.
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